Retail sector in Indonesia
Indonesia has young population. Approximately 50% of the population is between 15 – 30 years old which make the country will enjoy demographic bonus by 2020. Products which meet the needs of the “young and productive” will most likely have a better opportunity in the market.
The Indonesian economy is booming as a result of the commodities boom, foreign direct investment and government spending. The economy has enjoyed stable growth of 6 – 6.3% annually over the last five years. This growth is supported by domestic consumption and exports.
The Indonesian middle class was recorded as having reached 45million in 2012 and continues growing. The Indonesian middle class are those who spend between USD 4 to 20 per day. The size of the middle class is second only to of that in China. The resulting stronger purchasing power has led to greater spending on discretionary products, especially premium goods and international brands.
Indonesian consumers prefer internationally well-known brands and imported products, particularly for their children. Continuous development of organised retail infrastructure in major cities has also played a part in fostering this growth.
The centre of the retail sector is in Jakarta. Malls, hypermarkets and minimarkets are replacing traditional and wet markets. Consumers shop for quality and convenience, which is leading to a retail boom. FMCG has grown twice as fast as the overall economy. Consumers easily find international products in the market. International products enter the market through distributors or agents.
Key products demanded by the market include:
Food and drink
Dairy and dairy based products
Grocery products and premium cooking oil
Fashion, clothing and footwear
Personal care, including cosmetics
Over the counter pharmaceuticals, including health supplements
Our briefing on food & drink opportunities in Indonesia provides more detail on this sector.
Getting into the market
Finding a local partner is a mandatory requirement as a key to market entry. To take advantage of the opportunities available, it is crucial that companies:
Appoint the right business partner who has an Import Identifier Number (API – Angka Pengenal Import)
Visit the market on a regular basis (face-to-face contact and the development of relationships is critical to business success)
Prepare comprehensive information packs profiling your company, product specifications, pricing and terms of payment
Participate in major trade exhibitions to showcase products/ services to relevant audience/ buyers
As of September 2010, the National Agency of Food & Drug Control (BPOM) required all food and non-food products on sale in the country to carry labelling in Indonesian, setting out details of ingredients utilised, an expiration date determined by the Ministry of Health, and storage and preparation instructions when applicable.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
Interfood Indonesia Expo
JIExpo, Kemayoran Jakarta
28 – 31 August 2013
Jakarta Convention Center
JIExpo, Kemayoran, Jakarta
Indo Leather and Footwear
JIExpo, Kemayoran, Jakarta